It is time to get real about what the promised cap-and-trade tax means to the average American.
Politicians love cap and trade because they can claim to be taxing “polluters,” not workers. Hardly. Once the government creates a scarce new commodity — in this case the right to emit carbon — and then mandates that businesses buy it, the costs would inevitably be passed on to all consumers in the form of higher prices. Stating the obvious, Peter Orszag — now Mr. Obama’s budget director — told Congress last year that “Those price increases are essential to the success of a cap-and-trade program.”
Essentially Congress will be creating a new commodity literally out of thin air. It will only create a certain amount of that commodity and so create instant scarcity. As we all know, scarcity drives up prices. The next year, the plan is to remove a portion of the created commodity from the market creating even more scarcity and driving prices for the commodity even higher.
Imagine steel as the commodity. Imagine steel prices going through the roof. Do you suppose they might effect the price of, say, automobiles? Metal buildings? The price of building a bridge or sky scraper?
So who, in the final analysis, is going to end up paying for this increase in steel prices? Why the final consumer, of course. Naturally, with steel, in some cases you can choose to consume (buy a new car, rent an office or approve the bridge) or not consume. However, with the CO2 tax on all industry, to include manufacturing, service, transportation and energy, you have little choice in the matter of consumption. You will be picking up the tab for this.
That brings us full circle to the promised tax cut for 95% of America and my promise that what government gives with one hand it takes with another, making the tax cut illusory at best:
Hit hardest would be the “95% of working families” Mr. Obama keeps mentioning, usually omitting that his no-new-taxes pledge comes with the caveat “unless you use energy.” Putting a price on carbon is regressive by definition because poor and middle-income households spend more of their paychecks on things like gas to drive to work, groceries or home heating.
After all the caterwalling the left does about “progressive taxation” they are about to implement the most regressive tax I can imagine. And as I’ve pointed out, the tax is pervasive, touching just about all aspects of life. Food prices will rise. Energy prices will go through the roof.
The Congressional Budget Office — Mr. Orszag’s former roost — estimates that the price hikes from a 15% cut in emissions would cost the average household in the bottom-income quintile about 3.3% of its after-tax income every year. That’s about $680, not including the costs of reduced employment and output. The three middle quintiles would see their paychecks cut between $880 and $1,500, or 2.9% to 2.7% of income. The rich would pay 1.7%. Cap and trade is the ideal policy for every Beltway analyst who thinks the tax code is too progressive (all five of them).
Of course there is talk of subsidizing those at the lower end of the economic ladder so the impact of rising prices is lessened. Naturally that also negates the impact of the cap-and-trade system. In the end, your tax dollars subsidze the system while increased prices are passed along by so-called polluters. As the price of permits rise over the years, permit holders pay the increasing cost, pass it along and you again subsidize it. The rich can afford it, the poor will be subsidized, so who will get squeezed? Why that middle class that Obama and Biden are so concerned with.
Economically, estimates are that we’re going to have a miserable year in ’09 and possibly ’10. But we may begin to see a recovery really start to take hold in ’11, just in time for the 2012 presidential election. The smart politicians in Washington plan to delay cap-and-trade implementation until 2012. The reason should be obvious. If cap-and-trade has the expected impact on the economy, we could very well see the recovery stall and head back into recession. But politically the timing would be perfect. The mirage of recovery would be just enough to keep the current administration in power for another 4 years, before the economy wrecker of cap-and-trade begins to do its work.
The NYT’s White House reporters got an exclusive interview with Pres. Obama, and one of the pressing questions on their minds was what his ideology is. They asked if, given his spending priorities, he is a socialist, to which he said no, and when they asked if he was a “liberal” or a “progressive” or any other one-word answer, he declined to comment. I can understand him saying that.
But then, after the interview, the president called the reporters back, like he’d thought up a really good zinger after the fact:
It was hard for me to believe you were entirely serious about that socialist question. I did think it might be useful to point out that it wasn’t under me that we started buying a whole bunch of shares of banks. It wasn’t on my watch. And it wasn’t on my watch that we passed a massive new entitlement – the prescription drug plan — without a source of funding. And so I think it’s important just to note when you start hearing folks thro[w] these words around that we’ve actually been operating in a way that is entirely consistent with free-market principles and that some of the same folks who are throwing the word ‘socialist’ around can’t say the same.
Q. So who[se] watch are we talking about here?
A. [*Chuckle*] Well, I just think it’s clear by the time we got here, there already had been an enormous infusion of taxpayer money into the financial system. And the thing I constantly try to emphasize to people is that if, coming in, the market was doing fine, nobody would be happier than me to stay out of it. I have more than enough to do without having to worry the financial system. And the fact that we’ve had to take these extraordinary measures and intervene is not an indication of my ideological preferences, but an indication of the degree to which lax regulation and extravagant risk-taking has precipitated a crisis.
This is bittersweet, because on the one hand, he clears up any misconception that Bush was effectively conservative (or as John Kerry claimed, extreme libertarian). He says, to his credit, that buying up shares of banks and passing a massive new entitlement (or at least one financed by borrowing) are inconsistent with free-market principles.
I like how Obama says that the financial bailout wasn’t on his watch, when he voted for it as a Senator. But he’s right about Bush. With Obama’s help, a Republican president did dump mountains of wealth into the thermal boreholes of the most heavily regulated sector of the economy—that’s the financial sector, dear reader, although health care is way up there. And afterward, Bush was frank enough to admit that he had “abandoned free-market principles,” although he had the monumental cheek to say he had done so “to save the free-market system.”
But on the other hand, Obama claims that his team’s been operating in a way that is “entirely consistent with free-market principles“! I feel like launching into one of those “Really!?!” segments from SNL, only less funny and more desperate.
Really, Mr. President? And you’re not shoveling piles of taxpayer money into the financial system? You’re not planning any massive expansions of entitlement spending? Really? And you’re going to come up with a source of funding for all of this? Without taxing anyone but the top two five percent? Really.
Really, Mr. President, all you’ve talked about since this crisis started is how everyone in the private sector needs a regulatory cavity search deep enough to do a ventriloquist act. As if what we really need is more Sarbanes-Oxley, SEC and FASB rule changes — because it was our lax regulation that all those businesses ran overseas to escape.
And if I’m putting together a line-up of who caused the “extravagant risk-taking” like the massive overborrowing that inflated the residential real estate bubble, shouldn’t my first suspects be Fannie & Freddie, the Fed and government subsidies?
Your response to this crisis is to borrow more money to subsidize energy, public transportation, public education and state-mandated health care, and really, isn’t that what the free market is all about? Thanks for the assurances that you’re not in favor of bigger government.
Your budget, the stimulus, that second stimulus you hinted at, and rescuing all those giant institutions, some of them for the second and third time: these are all entirely consistent with free-market principles? I mean, really.
Someone help me out. Exactly which free-market principles has the president adhered to, either in his campaign promises or in his actions in office? Tell me why Obama is not mistaken or lying.
Or, perhaps, “all of the above”. From the UK Telegraph:
Sources close to the White House say Mr Obama and his staff have been “overwhelmed” by the economic meltdown and have voiced concerns that the new president is not getting enough rest.
British officials, meanwhile, admit that the White House and US State Department staff were utterly bemused by complaints that the Prime Minister should have been granted full-blown press conference and a formal dinner, as has been customary. They concede that Obama aides seemed unfamiliar with the expectations that surround a major visit by a British prime minister.
But Washington figures with access to Mr Obama’s inner circle explained the slight by saying that those high up in the administration have had little time to deal with international matters, let alone the diplomatic niceties of the special relationship.
Allies of Mr Obama say his weary appearance in the Oval Office with Mr Brown illustrates the strain he is now under, and the president’s surprise at the sheer volume of business that crosses his desk.
A well-connected Washington figure, who is close to members of Mr Obama’s inner circle, expressed concern that Mr Obama had failed so far to “even fake an interest in foreign policy”.
And here we were led to believe Mr. Obama was this cool, multitasker under full control and able to handle everything the job entailed.
That’s what we were led to believe.
Some of us, however, said that of all the jobs on the planet this wasn’t the one for OJT. This isn’t a job where one aspect of the duties can be ignored to concentrate on others.
Guess which group looks more prescient at the moment?
Apparently Timothy Geithner isn’t the financial “rock star” he was touted to be if his handling of the Asian crisis 10 years ago is any indication.
While Obama may have “inherited” the financial problems, the bear market is all his.
Speaking of lay-offs, this isn’t going to make our jet jocks feel very secure.
The new slogan of the Democrats – never let a good crisis go to waste. So this is a “good” crisis?
Take a look at this page and tell me where are the promised tax money from rich folks is going to come from.
If you don’t believe government is contemplating some pretty heavy care rationing when and if they get control, read this little beauty carefully.
Even George McGovern finds the pending card check legislation desired by unions to be “fundamentally wrong” and undemocratic.
Grey wolves “delisted” from endangered species list.
No time for Gordon Brown, but plenty of time for Brad Pitt. Wonder if Pitt got a 25 volume DVD set too?
Is Obama preparing the way for a massive defense spending cut?
Even Paul Krugman is getting a little antsy about the apparent lack of focus of the Obama administration on the financial crisis.
It appears Hugo Chavez recognizes a kindred spirit when he sees one.
The Senate is one vote short of passing the omnibus spending bill with 9,000 earmarks. All I wonder is which Republican will cave first?
Some specifics about the record job losses:
Hiring last month in goods-producing industries fell by 276,000. Within this group, manufacturing firms cut 168,000 jobs bringing the total since the recession began to 1.3 million.
Construction employment was down 104,000 last month. The unemployment rate in that sector is now 21.4%, almost double where it was this time last year.
Service-sector employment tumbled 375,000. Business and professional services companies shed 180,000 jobs, the fourth-straight six-figure loss, and financial-sector payrolls were down 44,000.
Retail trade cut almost 40,000 jobs, while leisure and hospitality businesses shed 33,000 as households curtail nonessential spending.
Temporary employment, a leading indicator of future job prospects, fell by almost 80,000.
So there, in a nutshell, is the status of the productive sector of the economy – the sector that produces wealth, jobs and growth. The sector that should be the focus of any recovery plans and stimulus money.
Instead, what is the President talking about in Ohio, as he panders in the buckle of the rust belt (via email transcript)?
Today I’m pleased to announce that Attorney General Eric Holder and the Department of Justice are making available $2 billion in justice assistance grants from the recovery act. (Applause.) That’s funding that will help communities throughout America keep their neighborhoods safer, with more cops, more prosecutors, more probation officers, more radios and equipment, more help for crime victims, and more crime prevention programs for youth.
Cities and states can apply for these funds right away, and as soon as those applications are received, the Justice Department will start getting the money out the door within 15 days. In Savannah, Georgia, the police department would use this funding to hire more crime and intelligence analysts and put more cops on the beat protecting our schools. In Long Beach, California, it will be able to help fund 17,000 hours of overtime for law enforcement officials who are needed in high-crime areas.
West Haven, Connecticut, will be able to restore crime prevention programs that were cut even though they improved the quality of life in the city’s most troubled neighborhoods. And the state of Iowa will be able to rehire drug enforcement officers and restart drug prevention programs that have been critical in fighting the crime and violence that plagues too many cities and too many towns.
So the list goes on and on. From Maine to San Francisco, from Colorado to New Jersey, these grants will put Americans to work doing the work necessary to keep America safe. They’ll be directed only towards worthy programs that have been carefully planned and proven to work. And Vice President Biden and I will be holding every state and community accountable for the tax dollars they spend.
More cops, more prosecutors, more parole officers.
Private sector jobs? Nada.
Now I understand we need all of those people he talks about. But they won’t help one bit in creating new wealth, new jobs or new opportunities for both, will they? They’re a number Obama can point too when he tries to sell is jobs “saved or created” nonsense in a few years. But as far as a stimulus to the economy – huh uh. What they are, however, are precisely what is expected from a big government liberal – government jobs.
As the WSJ further informs us after giving us the bad news about the productive sector of the economy above, “the government added 9,000 jobs.”
David Brooks, 3 days after a semi-courageous, “what-the-heck-is-going-on” column, received calls from the senior staff at the White House and quietly got back in line:
In the first place, they do not see themselves as a group of liberal crusaders. They see themselves as pragmatists who inherited a government and an economy that have been thrown out of whack. They’re not engaged in an ideological project to overturn the Reagan Revolution, a fight that was over long ago. They’re trying to restore balance: nurture an economy so that productivity gains are shared by the middle class and correct the irresponsible habits that developed during the Bush era.
The budget, they continue, isn’t some grand transformation of America. It raises taxes on energy and offsets them with tax cuts for the middle class. It raises taxes on the rich to a level slightly above where they were in the Clinton years and then uses the money as a down payment on health care reform. That’s what the budget does. It’s not the Russian Revolution.
How moderately wonderful, right? They’ve now dazzled Brooks again. They’re not “liberal crusaders”, they’re moderate pragmatists who want to lend stability to the economy.
Brooks then goes through a litany of things “Republicans should like”. He finishes up by claiming he still thinks they’re trying to do too much too fast, and that may lead to problems “down the road”, but all in all, he’s impressed by their sincerity, commitment to what is best for America and the fact that all of this is not going to cost anywhere near what all the critics claim.
On their face, the arguments are nonsense. This is the biggest planned expansion of government in a century. Estimates are the federal government will be hiring between 100,000 and 250,000 new employees to oversee its new programs and spend the trillions of dollars being borrowed through debt instruments right now.
Unlike the rather facile and easy to impress Brooks, Charles Krauthammer takes a look at the spin and deconstructs it rather handily.
At the very center of our economic near-depression is a credit bubble, a housing collapse and a systemic failure of the entire banking system. One can come up with a host of causes: Fannie Mae and Freddie Mac pushed by Washington (and greed) into improvident loans, corrupted bond-ratings agencies, insufficient regulation of new and exotic debt instruments, the easy money policy of Alan Greenspan’s Fed, irresponsible bankers pushing (and then unloading in packaged loan instruments) highly dubious mortgages, greedy house-flippers, deceitful homebuyers.
The list is long. But the list of causes of the collapse of the financial system does not include the absence of universal health care, let alone of computerized medical records. Nor the absence of an industry-killing cap-and-trade carbon levy. Nor the lack of college graduates. Indeed, one could perversely make the case that, if anything, the proliferation of overeducated, Gucci-wearing, smart-ass MBAs inventing ever more sophisticated and opaque mathematical models and debt instruments helped get us into this credit catastrophe in the first place.
And yet with our financial house on fire, Obama makes clear both in his speech and his budget that the essence of his presidency will be the transformation of health care, education and energy. Four months after winning the election, six weeks after his swearing in, Obama has yet to unveil a plan to deal with the banking crisis.
As Krauthammer points out, none of the costly things that Obama pledged to focus on have anything to do with the down economy. They all do, however, include the the probability of causing even more damage if enacted.
And since they’ve been in office, Obama or his surrogates (mostly in the guise of Timothy “tax cheat” Geithner”) have talked down the stock market, the auto industry, the oil and gas industry, the health care industry, energy, banks, financial and the defense industry. They still don’t seem to realize what impact their words have on markets, or if they do, then one has to assume they’re doing this on purpose. I tend toward the side of ignorance, but at some point, after it has been pointed out to them over and over again, you have to abandon that belief and head toward the other conclusion. Their words, quite literally, are wrecking the economy.
Markets can’t stand instability and insecurity. When leaders talk about what’s wrong with this industry or that industry and what they intend on doing to punish or change how that industry does business, investors get very nervous. As you might imagine, they’re extremely nervous right now, as reflected by the Dow. They know that there is a government assault coming, in some form or fashion, on the industries I’ve mentioned. So they’re going to get out of the position they now hold in them and they’re going to refrain from investing in them until they’re clear what that assault will entail. And I don’t use the word “assault” lightly.
Health care, defense, oil and gas, pharma, auto, energy, housing, banking, finance etc. are all under a form of assault by the new administration. Health care will change and expand dramatically under government auspices, oil and gas will lose tax breaks, cap-and-trade will bury the auto industry and shoot energy prices through the roof – affecting transportion and manufacturing. Cram-downs affect the housing, banking and financial sectors. Who wants to invest in any of that when a judge can reward irresponsible home owners with a write down of their principle? Meanwhile responsible home seekers will see the interest rate go up by about 2 points to cover the losses. That’ll spur homebuying, won’t it?
Like Dale pointed out about the Red Kangaroo, you can see this coming from a mile off. And “useful idiots” like David Brooks climb back on the bandwagon and resume cheering the parade to economic ruin.
Stephanie Gutmann brings up something I’ve noticed. She starts with an Orwell quote:
“The program of the Two Minutes Hate varied from day to day, but there was none in which Goldstein was not the principal figure. He was the primal traitor…All subsequent crimes against the Party, all treacheries, acts of sabotage, heresies, deviations, sprang directly out of his teaching. Somewhere or other he was still alive and hatching his conspiracies, perhaps somewhere beyond the sea, under the protection of his foreign paymasters perhaps even — so it was occasionally rumoured in some hiding place in Oceania itself.”
1984 by George Orwell
She then says:
In the passage above, and throughout 1984 and Animal Farm, George Orwell illustrates how regimes with tentative hold over beleaguered populations deflect anger away from their own corruptions and mistakes with the deployment of a greatly embellished, even invented, external enemy.
There are many things that bug me about Barack Obama — the insane laundry list speeches, the silly rhetoric, the hostility to the free market — but these are all talked about. He has another habit that hasn’t been talked about so much and, of all the things he does, it makes me the most queasy.
It’s pretty subtle, but I think it’s worth keeping an eye on because, if it were to become full-blown, it has the potential to be the most socially damaging element of his presidency.
I’m talking about what I’m going to call his Goldstein-ism, his tendency to make veiled, dark allusions to a recently vanquished “other”, an evil being (he is never specific) who is, he always implies, the real cause of all our problems.
His references to his “inherited” problem, to bankers, greedy Wall Street and his “predecessor” are all too common, not to mention Limbaugh and Hannity.
So why this tendency to attempt to deflect criticism by blaming it on others? Well, consider the Obama march to the presidency. His entire campaign was based on how bad George Bush was and how necessary it was to replace him. Bush was Obama’s “Goldstein”. And Obama used Bush to deflect attention from his own paper thin resume and lack of experience. He managed to make Bush so bad that those things didn’t matter to most Americans who bought the characterization.
But Bush is gone now. And Obama has no specific “Goldstein” with whom he can shift blame and/or deflect attention. But Gutmann points out, he still tries to use Bush when possible. For example:
Monday was full of terrible economic news. It was another day of “unstoppable selling on Wall Street,” according to AP, a day in which Foreign Policy said ” the markets were sending an unambiguous signal that the U.S. economy is now headed in the wrong direction.” How did the administration respond?
I do not think it a coincidence that late in the day the administration “threw open the curtain on years of Bush-era secrets” as the ever in-the-tank Associated Press put it, with the release of memos “that claimed exceptional search-and-seizure powers…”
Soooo, what was in these scary-sounding memos? Midway down the article AP explains that the memos detailed possible legal rationale for tactics the Bush admin was considering using in its anti-terror program. You’d have to read further still to see that the “Bush administration eventually abandoned many of the legal conclusions.” Nevertheless, AP harrumphs, “the documents themselves [about stuff that had been discussed] had been closely held.” But who cares what the article actually said: It generated a nice headline — “Obama releases secret Bush anti-terror memos” — during a day the populace might have been thinking disloyal thoughts about the their president’s direction.
Of course this gets harder and harder for Obama to do, and besides, it’s unseemly if a president does it – that’s what minions are for. And as Bush fades, a new Goldstien is necessary. Enter Robert Gibbs, Rush Limbaugh, and others:
Jim Cramer. Rush Limbaugh. Rick Santelli.
What do they all have in common? Most likely, none of them is getting invited to the White House Christmas party.
All three media personalities have been singled out by President Obama’s press shop in the course of less than two weeks. White House Press Secretary Robert Gibbs, in doing so, has shown an unusual willingness to spar with cable and radio hosts who take shots at his boss.
The rebuttals have ranged from playful ribbing to disdainful scolding.
One of the things we didn’t see, for the most part, was these sorts of assaults on people who weren’t the political opposition during the Bush years. And, in fact, few assaults on those that were in the political opposition. Never once was Keith Olberman or a host of others called out from the White House Press Secretary’s podium. In fact, they were mostly, if not completely ignored. But obviously the same can’t be said of the Obama White House.
So, you have to ask, “why”?
Try Rule 12 from Saul Alinsky’s “Rules for Radicals“:
RULE 12: Pick the target, freeze it, personalize it, and polarize it.” Cut off the support network and isolate the target from sympathy. Go after people and not institutions; people hurt faster than institutions.
As you recall, Mr. Bi-partisan, “heal the nation” Obama did have one thing on that thin resume – he was a community organizer from the Saul Alinsky school of organizing.
And as for the attacks coming from the White House Press podium? Rule 5 covers that:
RULE 5: “Ridicule is man’s most potent weapon.” There is no defense. It’s irrational. It’s infuriating. It also works as a key pressure point to force the enemy into concessions.
After watching the man for two plus years, I’ve come to realize this is more than a tendency, it’s his modus operandi. And one should assume his administration will reflect the bosses MO when dealing with criticism. The difference is Obama has himself under pretty tight control. I’m not so sure that can be said of some others. And that’s where Rule 6 comes in:
RULE 6: “A good tactic is one your people enjoy.” They’ll keep doing it without urging and come back to do more. They’re doing their thing, and will even suggest better ones.
The danger with Rule 6 as it is now being executed gleefully by Gibbs (“There are very few days that I’ve had more fun,” Gibbs said.) is that he (and others) will overreach. They always do. And it certainly came as no surprise to me to find out Rahm Emanuel was involved in the Limbaugh attacks. So my prediction is this new and advanced “politics of personal destruction” campaign that this administration has embarked on will blow up in their face at some point.
But that doesn’t detract from Gutmann’s point about Obama’s tendency to need and rely on a “Goldstein”. I’m not a psychologist or a psychiatrist, but it seems to indicate, at least to me, a deep-seated sense of insecurity. If I had no more experience than Obama has, I might be looking for such a scape-goat myself. Knowing that, however, damn well doesn’t make me feel better about it though. But we shouldn’t be surprised when a Saul Alinsky trained community organizer acts like a Saul Alinsky trained community organizer, should we?
Over the past few days, I’ve been highlighting the fact that the promise of tax cuts for 95% of Americans is illusory at best. If your bottom line is net spendable income, then despite the Obama promise, you’re going to have less of it when all his plans for your income are passed into law. Or, as I’ve been pointing out, while he’ll make a big deal of the tax cut for the 95% on the one hand, he’ll be taking what he’s cut back and more with the other.
The Detroit News editorial board seems to have figured that out:
President Barack Obama’s proposed cap-and-trade system on greenhouse gas emissions is a giant economic dagger aimed at the nation’s heartland — particularly Michigan. It is a multibillion-dollar tax hike on everything that Michigan does, including making things, driving cars and burning coal.
Tell me – who is it that has been whining for years about losing manufacturing jobs to overseas competitors? Who has thumped the podium about “outsourcing”? Who has claimed to be the champion of the working man?
The same crew that wants to enact draconian taxes which will affect the very companies and jobs they claim they want to save or create. And while the companies will do all they can to pass on the cost to the consumer (thereby negating any tax cut), they will have to absorb some of the cost to stay competitive.
Doing so will drive up the cost of nearly everything and will amount to a major tax increase for American consumers.
Or companies can go to countries who don’t have cap-and-trade laws such as China and India and set up there. Of course if they do, they’ll be called “unpatriotic” and the government who forced the issue will declare them the problem.
And the net result?
The proposed tax would take effect in 2012 and has the very real potential to throw the nation back into recession, if indeed the expected recovery has arrived by then. It’s impossible to raise costs for such basics as manufacturing and energy production by more than half a trillion dollars over a decade and not have the effects felt across the economy.
Economic common sense. But you see, the 2012 effective date is a result of political calculation. If we are seen to be climbing out of the recession by 2011, most likely the Obama administration will get a second term. After that they couldn’t care less how they or their policies are viewed. And it is far enough from 2016 that they think it may be politically survivable for the Democrats.
However it also means that if the GOP starts hammering on this now and making the same sense the Detroit News editorial board is making, there’s a chance they can use it as an issue to try to recapture power. That assumes, of course, they have the smarts and the spine to stand up, make the consequences known and ensure they frame the argument instead of letting the Democrats spin it away.
How likely is that?
Oh, and just for the record:
A similar program in Europe hasn’t worked. European automakers complained about carbon dioxide limits the European Union proposed in 2007 as damaging to the economy.
What is something you probably shouldn’t do if you want to see an industry “save or create” jobs?
U.S. oil and natural gas producing companies should not receive federal subsidies in the form of tax breaks because their businesses contribute to global warming, U.S. Treasury Secretary Timothy Geithner told Congress on Wednesday.
It was one of the sharpest attacks yet on the oil and gas industry by a top Obama administration official, reinforcing the White House stance that new U.S. energy policy will focus on promoting renewable energy sources like wind and solar power and rely less on traditional fossil fuels like oil as America tackles climate change.
Got that? They shouldn’t get tax breaks because they “contribute to global warming”. Freakin’ incredible. An ideological reason given to deny tax breaks. Here’s government again picking winners and losers.
The Obama administration’s budget would levy an excise tax on oil and natural gas produced in the Gulf of Mexico, raising $5.3 billion in revenue from 2011 to 2019.
And in a time of financial crisis, that cost will be passed on to whom?
Obama’s budget would also place a $4 per acre annual fee on energy leases in the Gulf that are designated as nonproducing. The budget proposal projects the fee would generate $1.2 billion from 2010 to 2019.
Of course, they’re talking millions of acres out there. As Sen. Cornyn points out, it won’t be the ExxonMobile’s or the Chevrons which will be hurt by this:
Senator John Cornyn of Texas criticized the tax increases, saying they would hurt independent energy companies that provide a large share of U.S. oil and gas supplies.
“My view is that higher taxes on small and independent producers here in America will make us more dependent on imported oil and gas while we transition to cleaner energy alternatives, a goal we all share,” said Cornyn. “And it will also hurt job retention and job creation in the energy sector, which provides an awful lot of jobs in this country.”
Yup – it’s all about “saving or creating” jobs – if government approves.
When it comes to military procurement, President Obama says:
“I reject the false choice between securing this nation and wasting billions of taxpayer dollars,” Obama said on a day when he signed a presidential memorandum reforming the contracting system across the entire government.
But when it comes to a spending bill with 9,000 earmarks?
Democratic Senator Evan Bayh calls it what it is – wasteful spending.
Where’s the presidential leadership on this? If there’s waste in the procurement system and that’s a target, why isn’t waste in the spending bill also a target?